Prime Minister Dr. Manmohan Singh has assured foreign investors that his government is committed to taking hard and difficult decisions in the long-term interest of the Indian economy, and expressed confidence that the country would return to a growth path of eight per cent.
"Our people have tasted the benefits of rapid growth and they will not settle for less," Dr. Singh said at a luncheon hosted by Nippon Keidanren, the Japan Business Federation, in Tokyo.
"India's Twelfth Five Year Plan outlines the many things we have to do to realise our full growth potential and to make that growth inclusive and sustainable. Our people have tasted the benefits of rapid growth and they will not settle for less. I want to assure you that our government is committed to take hard and difficult decisions in the long term interest of our economy," he added.
Stating that India too has been affected by the difficult circumstances in the world economy, Dr. Singh said: " Our growth rate came down to five percent last year due to a combination of global factors and domestic constraints. We cannot do much about the global economy. But we have reacted with determination to overcome domestic constraints on economic growth."
"The five percent growth witnessed last year should be seen as a temporary slow down. The Indian economy grew at an average of eight percent per year over the past decade, including the last year of five percent growth. The economic fundamentals which made that possible are still intact. We are confident therefore that we can return to the growth path of eight percent," he added.
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Dr Singh said that the Government had, in recent months, taken a number of steps to revive the economy.
" We have started to bring the fiscal deficit under control and also outlined a medium term path for fiscal consolidation. We have accelerated the implementation of large infrastructure projects by setting up special mechanisms to ensure that various regulatory clearances do not lead to delays. We have taken tangible steps to enhance incentives for investments. We have liberalised foreign investments in areas like multi-brand retail, power exchanges and civil aviation and further rationalisation and simplification is being planned. We have introduced further reforms in the financial markets," he added.
He said the Central Bank had indicated that it would start the process of expanding grant of new bank licenses.
"As a result of these efforts, we expect that growth in 2013-14 will be much better than in the previous year, hopefully around 6 percent or so. We will do even better in 2014-15," he added.
Emphasising that our strategy for growth involves heavy investment in infrastructure, Dr. Singh said: "Lack of quality infrastructure is the single biggest obstacle to achieving higher levels of competitiveness in India. We have targeted an investment of around 1 trillion US dollars in infrastructure over the Twelfth Plan period, with half of it coming from the private sector and public-private-partnership."
"India's growth will provide expanding opportunities for foreign investment. We welcome foreign investment in the development of our economy and especially so in the critical infrastructure sector. I hope Japanese business will pick up a large share of the investment opportunities that India offers," he added.
